Over the first six months of 2005, around 10,900 equity release loans were made with a total value of £492 million (compared to 15,000 loans with a value of £693 million, in the second half of 2004). The value of lending in the first half of 2005 is only marginally lower (three per cent) than at the same time last year. This brings the total value of outstanding equity release mortgages to £4.6 billion, representing 94,000 mortgages.
Although growth in the first half of 2005 is lower than in previous years, and lower than in the second half of 2004, this is likely to be partly explained by seasonal factors and a slow-down in house price growth which has dampened both the willingness and ability of borrowers to unlock the equity in their property.
Commenting on the results, Jackie Bennett, CML Senior Policy Adviser commented:
"Today's figures demonstrate how lenders, intermediaries and consumers are taking a cautious and responsible approach to opening up the equity release market. Our results show that the equity release market is still growing, although at a slower rate than in previous years. The fact that there is still considerable unmortgaged equity in the over 65s, and lifetime mortgages only represent half of one per cent of outstanding mortgage balances, means that this is an area with considerable potential for growth."
